#39;We are united,#39; says IndiGo CEO, quells speculation on rift between founders

May 19
02:57 2019

In an attempt to quell speculation over differences between the two IndiGo founders, Rahul Bhatia and Rakesh Gangwal, airline CEO Ronojoy Dutta came out strongly in a statement on the night of May 18, reiterating that, “We are all very much united in vision, purpose and direction as we move forward to build a world class (airline).”

“I would like to forcefully address these baseless speculations as they are not in the best interests of our shareholders, our employees and the travelling public,” Dutta said.

He then goes on to address the issues one-by-one.

Importantly, his statement also includes a clarification from Gangwal. The IndiGo co-founder said:

“I am categorically and clearly stating that there is no interest or desire whatsoever on the part of the RG Group (Gangwal’s holding company through which he holds stakes in IndiGo)  to take control of the company. Also, to put to rest the messaging on the fact that the RG Group is attempting to renegotiate the Shareholders Agreement, I am placing on record that the RG Group stands by the current SHA which, in any case, expires this October”.

Differences between the two founders had first come out after Moneycontrol’s story in December last year. The two founders, sources had said, deferred on key managerial appointments. Speculation over the differences gathered fire earlier this week after fresh reports come out.

Hiring of law firms

On news that the two founders had hired law firms to settle differences, Dutta said:

“It is true that the IGE group (owned by Bhatia) is represented by the law firm of JSA and the RG Group is represented by the law firm of Khaitan & Company. These prestigious law firms have been on retainer by the founders since at least the time of the IPO of the Company in 2015 and they continue to represent the promoters on various ongoing matters as it relates to their shareholding in IndiGo. Thus, the 4 year old ongoing retainer history of the law firms should not be presented or seen as a new revelation.”

Management changes

Dutta said transitions are natural in all companies.

“It is true that IndiGo has gone through a number of changes in a continuum that stretches from Aditya Ghosh, to Greg Taylor to a team of highly skilled expatriates to me… But all great companies go through periods of transition as they evolve from one phase of their growth to another and a little bit of turbulence during these transition phases is neither unusual nor unwelcome,” he said.

Dutta added that promoters ” worked as a team in making these management changes.”

IndiGo’s expansion

The reports had led to a sharp fall in IndiGo’s shares earlier this week. Investors feared that exit of one of the promoters could impact the airline’s growth.

Dutta reiterated that the company “remain committed to our path of a rapid build-up of airline connectivity within India and to international destinations. Reiterating this, the full Board wants to clearly state that ‘IndiGo’s strategy in terms of growth and cost leadership remain unchanged, we remain committed to being an institution which benchmarks itself against the best-in-class organizations across the world’.”

Accepting that differences will be there in any company, Dutta, at the same time, also stressed that “the company has a great track record of resolving issues and coming out ahead. If the current differences were to not get resolved, you shall certainly hear about it; however, it serves no purpose speculating about it.”

“I deeply resent and wish to dispel all attempts to portray us as a fractured team at IndiGo,” he concluded.

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